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Winter Fuel Payment may be reinstated with 'strange' new means-test systemGovernment is set to u-turn over the £300 Allowance and reinstate it.NewsJames Rodger Content Editor12:06, 03 Jun

2025Government is set to u-turn over the £300 Allowance and reinstate it. The Winter Fuel Payment could be reinstated but with a "strange" new means-testing system, according to the

Institute for Fiscal Studies. The Labour Party government is set to u-turn over the £300 Allowance and reinstate it.

The IFS states: "Create a new means-tested system. The government could allow households not on PC to apply directly for WFP, reporting their income and other circumstances, enabling it to

apply a means-test with a higher eligibility threshold than PC.

‌ "The hassle of applying would no doubt result in many not claiming, and would imply a lot of administrative cost for what is a fairly small benefit (average WFP entitlement is £242 per

year; average PC entitlement is £4,300).

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"A closely related option would be to do the equivalent of what is currently done for child benefit: allow all pensioner households to claim WFP, but then require those who have income above

a certain level to do a self-assessment tax return to pay some of it back in the form of a higher income tax charge.

Article continues below "As with child benefit, the most administratively straightforward way to do this would be to base the repayment on the income of the higher-income member of the

household (rather than their total income), creating a somewhat strange means-test."

It adds: "And again, there would be clear downsides in the form of administrative costs and non-take-up – it is time consuming for both taxpayers and the government to fill in and assess

self-assessment tax returns."

Labour MPs returning to Westminster after the local election campaign this month all reported a single policy dominating all others: cuts to the winter fuel allowance.

Article continues below “It is all people wanted to talk about on the doorstep,” said one. “Some were upset about the coming cuts to disability benefits, some were exercised by immigration.

But everyone was angry about winter fuel payments.”

“The decision was taken by the Treasury,” said one former government aide. “By the time Downing Street saw it, it had already been factored into the forecasts and it was too late to change

it.”